MARKETING PROJECT

BY: SAACHI MATAI

 Objective:
To visit a departmental store (retail shop) located nearby
and to study and report on the functioning of the store.

The Departmental Store I chose:

INDEX
INTRODUCTION
Forever 21, stylized as FOREVER 21, is an American fast
fashion retailer headquartered in Los Angeles, California.

Forever 21 began as the store called Fashion 21 with 900 square feet
(84 m2) in Highland Park, Los Angeles, in 1984, and has grown into the
clothing lines Forever 21, XXI Forever, Love 21 and Heritage with over
700 stores in the Americas, Asia, the Middle East and the UK.

Forever 21 is known for its fashionable and trendy offerings with very
low pricing, while it is an epitome of the rapidly-growing fast fashion
industry.

The company sells accessories, beauty products, home goods,

and clothing for women, men and children.

HISTORY
Originally known as Fashion 21, the store was founded in Los Angeles
on April 16, 1984 by husband and wife, Do Won Chang and Jin Sook
Chang from South Korea.

The store is located at 5637 N. Figueroa Street in the Highland Park

district of Los Angeles and is still in operation, bearing the chain's
original name.

Designs similar to those seen in South Korea were sold to and targeted at

the Los Angeles Korean American community. In its first year in
operation, sales totaled $700K and by 2013, there were more than 480
stores and revenue of $3.7 billion.

Originally, Forever 21 only sold clothes for women but later expanded
to sell menswear. Most Forever 21 stores now sell clothes for men and
women, including plus size clothing for women.

On its website, it also sells girls' clothing and home/lifestyle products.

Forever 21's sales peaked in 2015, with $4.4 billion in global sales that
year, and in 2017, Forever 21 generated a revenue of $3.4 billion.

MISSION STATEMENT

Forever 21 mission statement is “to provide shoppers with an

unprecedented selection of today’s fashions with affordable prices.”
The statement shows how important the satisfaction of its clients is to its
progressive growth. It does this by:
1. Transforming shopping
2. Improving lives

In all its 460 stores across the U.S., Forever 21 implements a dynamic
yet interactive shopping style. Its employees are ever willing to direct
the clients in any way possible and ensure that they enjoy their time
there to the fullest.

In addition, the company offers an online shopping system with a

dependable delivery service throughout the country. By providing all
these services,

Forever 21 satisfies the needs of all its customers, including men,

women and children.

The availability of a variety of brads and the latest styles makes the
retailer a darling for everyone in the U.S.

ORGANIZATIONAL STRUCTURE
 CORPORATE AFFAIRS

Forever 21 continues to be a fashion industry leader with a mission to make

the latest trends accessible to all. F21 persists on staying ahead of innovation
and providing styles and fit that our customers love. While reinventing for
now and beyond, we’re seeking passionate and creative new family members
to join us on this adventure! F21 continues to operate E-commerce and 450
locations across the U.S. along with maintaining a strong brand DNA with
consumers and within the fashion industry. In February 2020, Forever 21
came under new ownership made up of Simon Property Group, Brookfield
Property Partners, and Authentic Brands Group. Under this new ownership
F21 has the financial strength and long term view that will prepare us for the
future, while continuing to set the same high standards as it always has. Join
our team and learn the inner sanctum of the global fashion industry, while we
build the new Forever 21! Forever 21 is operated by SPARC Group LLC.
About SPARC Group LLC SPARC Group LLC offers operational and
strategic expertise including retail and e-commerce management, sourcing,
design and technology for leading global brands. SPARC Group is a joint
venture between Simon Property Group, a preeminent retail real estate
company and Authentic Brands Group, a global leader in brand development.
In addition to Forever 21, SPARC Group brands include Aéropostale, Brooks
Brothers, Nautica, Eddie Bauer, and Lucky Brand. SPARC Group LLC is an
equal opportunity employer, and is committed to maintaining a workplace
free from prohibited employment conduct, including discrimination or
harassment on the basis of race, color, national origin, sex, age, religion,
disability, genetic information, sexual orientation, gender identity or
expression, marital status, domestic partner status, civil partnership, status as
a covered veteran, status in the Uniformed Services of the United States,
citizenship and any other characteristic protected by law.

FACT FILE

1. Forever 21 is an American fast fashion retailer headquartered in Los Angeles,

California
2. It is also stylized as FOREVER 21
3. Forever 21 began as the store called Fashion 21
4. With 900 square feet (84 m2) in Highland Park, Los Angeles, in 1984
5. It has grown into the clothing lines Forever 21, XXI Forever, Love 21 and
Heritage
6. With over 700 stores in the Americas, Asia, the Middle East and the UK
7. Forever 21 is known for its trendy offerings and low pricing
8. The average store size is 38,000 square feet (3,500 m2)
 9. The company sells accessories, beauty products, home goods and clothing for
women, men and children
10.The company has been involved in various controversies
11.Ranging from labor practice issues to copyright infringement accusations to
religion
12.The clothing is sold to all ages, from toddler to adult
13.In September 2019, the company filed for bankruptcy protection
14.And announced that it was ceasing operations in 40 countries
15.Closing most of its international and 178 of its US stores
16.The company plans to close most of its stores in Asia and Europe
17.So as to focus on the profitable core part of its operations
18.Originally known as Fashion 21, the store was founded in Los Angeles on April
16, 1984 by husband and wife, Do Won Chang and Jin Sook Chang from South
Korea
19.The store is located at 5637 N. Figueroa Street in the Highland Park district of
Los Angeles

MARKETING MIX

Forever 21 Product Strategy:

The product strategy and mix in Forever 21 marketing strategy can be
explained as follows:
Forever 21 is a popular fashion brand serving clothes for both men and
women across various age categories. Forever 21 has its presence
globally with a diverse portfolio of products in its marketing mix
ranging from beauty products and accessories to apparel for girls, men
and women. The company caters adults, kids and even toddlers as its
target customers.
Forever 21 Price/Pricing Strategy:
Below is the pricing strategy in Forever 21 marketing strategy:
Forever 21 is known for its pricing strategies.
It has a great deal reputation for meeting the fashion demand of its
customer at an economical price tag. The pricing strategy in its
marketing mix is that to compete in the aggressive industry. The
response received by the company from its customers speaks about the
strategy of the company by itself. The numbers are rising up as we
speak. The end of financial year generated 3.7 billion revenues for the
company from its 480 stores which increased to 3.9 billion and reached
4.5 billion in the next year. All the data shows that Forever 21 has
become one of the coveted brand because of its well thought of policies
of making products pocket- friendly and qualitative as well. Company
also caters to its high- end consumers as well. The number of units sold
by the brand is highest in USA.

Forever 21 Place & Distribution Strategy:

Following is the distribution strategy in the Forever 21 marketing mix:
Started in Los Angeles, Forever 21 has spread its network in various
countries around the world. It has more than 600 retail stores across
Asia, Europe, Middle-East, America and Africa. The company has
strategically established its huge outlets in the Countries like India,
Germany, Australia Japan, China, Brazil and United Kingdom. Forever
21also eyeing to go to the countries like Israel, Malaysia, Costa Rica,
Russia and Greece. The retail stores are at least as large as Thirty Eight
thousand Square-feet. On average 60 percent of the total production for
the company happens in manufacturing Plants located in China. Forever
21 has a substantially wide distribution channel and network around the
globe. This network consists of vendors, suppliers and franchise owners.
Except a few locations like Middle-East, the company has ownership of
the business.

Forever 21 Promotion & Advertising Strategy:

The promotional and advertising strategy in the Forever 21 marketing
strategy is as follows:
Forever 21 uses all media channels to ensure it reaches all its customers.
Promotional policies are required to maximize the reach of the brand and
to capitalize of market share. The company since its inception has been
an international organization which sold its products globally. To lure
customers from all around the world, Forever 21has been following
multiple promotional ideas. The rise of Social media has been a biggest
plus for the company. With the help of various social media platforms,
like Facebook, Twitter, Pintrest, Instagram etc company is spreading
awareness among the masses by each passing day. The increasing
popularity can be measured by its increase in number of followers of the
company’s official social media pages. Conventional methods like Print
and Digital media has been not dropped as well. The company’s official
website has been constantly upgrading to become more user friendly to
provide all the necessary information to the existing and potential
customers. Hence this completes the marketing mix of Forever 21.

STORE FORMATS

For Los Angeles-based fashion retailer Forever 21, the journey from a
single location on Figueroa Street in L.A. in 1984 to more than 680
global locations today has been transformative. Over the last three
decades, the brand has not shied away from innovation and
experimentation, implementing a range of different store sizes and
concepts along the way: from smaller 5,000-sq.-ft. layouts in its early
years, to larger 9,000-sq.-ft. concepts in the 2000s and a range of big-
box stores that range up to 40,000 sq. ft.

The latest development from Forever 21 is something else entirely,

however—a new branded concept that adds a fresh dimension to the
company: F21 red. F21 red was designed to respond to growing
customer demands for Forever 21 staples, delivering an increased depth
of product at a significantly lower price point. The F21 red concept is
intended to create an easy shopping experience for the entire family with
an assortment of fashion staples from each of the Forever 21 lines,
including Forever 21, Forever 21 Men, Forever 21 Plus and Forever 21
Girls. The concept makes it possible to stock that deeper inventory of
options, and makes F21 red a natural fit for power centers and similar
locations.
Providing greater quantities of the styles and trends customers are
looking for is just part of the F21 red equation, however. F21 red not
only maintains the value and entry-level category price points Forever
21 is known for offering, it brings them front-and-center. F21 red
shoppers can find jeans for under $8, tank tops for less than $5 and
camisoles for $2. From affordably priced fashion to floor plans,
everything about F21 red is designed around accessibility and
convenience.

From a store layout perspective, Men’s, Women’s and Kids sections are
clearly identified. Shoppers will notice a wider customer path designed
to accommodate strollers, further enhancing the image of a store
designed with a smooth and seamless customer experience top of mind.

The first F21 red store opened its doors in May 2014 in Azalea Shopping
Center in South Gate, California — and it rapidly became a popular
destination. Currently, there are three operating F21 red stores, with
stores in Oakdale Mall in Johnson City, New York, and The Shoppes at
Arbor Lakes in Maple Grove, Minnesota, joining the original South Gate
location. While the pace of new openings has been modest in the early
stages — a strategic decision designed to give the company an
opportunity to gauge consumer response and fine tune the operational
details — the success of the initial locations has validated the concept
and made it an easy decision to move forward with expansion plans.
“We are very pleased with the positive response to our Azalea store and
are excited to expand the F21 red concept to meet customer needs in
new markets,” said Linda Chang, Forever 21 VP of merchandising.

As part of the ongoing F21 red rollout, a larger expansion of stores is

slated to begin in 2015. F21 red will be expanding both domestically and
overseas, and, while specific markets will be strategically targeted, the
company will also be flexible and move to capitalize on emerging
opportunities.
Jonathan Lapat, X Team International President and principal with
Boston-based Strategic Retail Advisors, who is handling the brand’s
northeast expansion, says that because the F21 red concept manages to
bridge the gap between high fashion and low prices, there is a welcome
degree of flexibility available when targeting markets for new locations.

“This is an exciting retail concept with outstanding potential for

expansion, both throughout the northeast and nationally,” commented
Lapat. “The mass appeal of the brand and the high demand of the
product F21 red is offering makes it a great fit for a wide range of
markets and project types. We’re energized by the opportunity to help
this new concept make a splash in our region.”

And because F21 red stores generally slot into a different category of
retail and mixed-use destinations than traditional Forever 21 stores, there
is less risk of market redundancy and competitive overlap. For an
exciting new concept from a successful national brand, those look like
the ingredients of winning recipe.
 SERVICE MIX

People: F21 staff are well-trained at every level. The work environment
is quite modern, with staff rotating through each area and being
encouraged to develop and come up with the greatest apparel wear. F21
also collaborates with a number of international apparel designers to
create the current fashion trends. Employees come from a variety of
backgrounds and possess a variety of abilities. Employees' personal and
professional growth is prioritized.

Process: Customer relationship management is given a lot of weight.

Employees are taught how to keep high-profit clients by providing
superior service and offers. If there are any concerns, the F21 personnel
makes every attempt to settle them as soon as possible. Customers'
questions are answered by calling a customer service hotline. F21
employees assist consumers in choosing the finest items for them. As a
result, the service and delivery times are quite short, resulting in
delighted consumers. The company is employing artificial intelligence to
better understand its customers' demands and to offer the finest items
online as part of its business strategy.
Physical Evidence: F21 stores are well-lit, with a pleasant atmosphere
and friendly employees. The clothing is designed to have a pleasing
appearance that will appeal to buyers. The goods are of high quality and
up to date. F21 is broadening its product and expanding into new
markets throughout the world. It participates in public relations
initiatives to generate buzz in the market. During its introduction, for
example, celebrities were invited, creating a buzz in the market. User
tales and recommendations are always appreciated by the company, and
they aid in customer engagement. As a result, the F21 marketing mix is
complete.

FINANCIAL PERFORMANCE
 SWOT ANALYSIS

Strengths in the SWOT analysis of Forever 21 :

Strengths are defined as what each business does best in its gamut of
operations which can give it an upper hand over its competitors. The
following are the strengths of Forever 21 :

 Staying in trend: Forever 21 has positioned itself as a retailer

that stays on trend always and true to this it always has the
hottest trends for its shoppers in all categories. The fact that
Forever 21 is the one to set hot new trends in fashion is its
biggest strength.
 Something new every day: Forever 21 gives a lot of
importance to innovation and a regular shopper always finds
something new in the store every day. This eliminates the
boredom from clothes shopping and makes Forever 21 a hot
favorite amongst its customers.
 Affordable: Forever 21 has clothes starting at USD 60 and
has something for everyone be it kids, ladies, men, youngsters
or even serious adults. The brand is also affordable for most of
its shoppers and offers unique pieces of clothing at fair prices.
 Customer Savvy: A recent research by Forbes indicated that
Forever 21 is one of the country’s most customer-friendly
brands. Designers who work with the brand vouch that most
of their designs come from the customers themselves and the
company has a very storing system for recording the voice of
the customer and ensuring that feedback is translated into
reality in all their designs. The company does not look at high
and spends but focuses more on getting feedback from
customers and implementing it at the earliest possible
instance.
 Association with young celebrities: Forever 21 is associated
with a lot of new generation celebrities like Justin Beiber,
Lady Gaga, and Emma Watson. Thus the brand is seen as a
trendsetter by the younger generation and is hugely popular
amongst them.
Weaknesses in the SWOT analysis of Forever 21 :
Weaknesses are used to refer to areas where the business or the
brand needs improvement. Some of the key weaknesses of Forever 21
are:

 Private ownership: Though Forever 21 is a fast-moving

brand with stores all over the world and an estimated worth of
4.1 billion USD the firm still continues to be a privately
owned business which largely limits its reach to the family
only.
 Centralised decision making: Forever 21 being family
owned relies a lot on the decision making prowess of its
promoters and is not too open to suggestions from other
stakeholders, This centralized decision-making strategy of the
company is said to be creating a lot of dissatisfaction amongst
designers.
 Excessive focus on teens: Right from its name the company
has always been positioned as a young brand.The over
association with teens and young adults has created a
hesitation amongst older customers to buy clothes from
forever 21 and this may eventually become a risk for the
company.

Opportunities in the SWOT analysis of Forever 21 :

Opportunities refer to those avenues in the environment that surrounds
the business on which it can capitalize to increase its returns. Some of
the opportunities include:

 Growing need for youngsters to stick to trends: In an urban

setting the young adult is not just focused on trends but is
 forced to dress accordingly primarily because of peer pressure
to stick to fashion norms. For a fashion brand like Forever 21
which is all about trendy clothing, this presents a
huge opportunity.
 Fashion changes: The fashion industry is in a state of
perpetual evolution and no trend stays for too long. This
means that clothes grow out of fashion sooner and customer
tends to shop more often ensuring that their clothes are in
vogue with the latest fashion. This is an opportunity for all
clothing retailers.

Threats in the SWOT analysis of Forever 21 :

Threats are those factors in the environment which can be detrimental to
the growth of the business. Some of the threats include:

 Economic Crisis: The recession will reduce the propensity to

spend on non-essential items and luxury clothing brands will
take a big hit in sales.
 Focus on recycling: There is increased importance given to
how clothes can be recycled to avoid their carbon footprint
and the next huge trend will be recyclable clothes for which
costs may be high.

COMPETITORS

Forever 21's top competitors include Abercrombie & Fitch, Ralph

Lauren, Urban Outfitters, American Eagle Outfitters and H&M.

Abercrombie & Fitch (A&F) is an American lifestyle retailer that

focuses on casual wear. Its headquarters are in New Albany, Ohio. The
company operates three other offshoot brands: Abercrombie
Kids, Hollister Co., and Gilly Hicks. As of February 2020, the company
operated 854 stores across all brands.

Ralph Lauren Corporation is an American publicly traded fashion

company that was founded in 1967 by American fashion designer Ralph
Lauren. The company is headquartered in New York City, and it
produces products ranging from the mid-range to the luxury segments.
They are known for the marketing and distribution of products in four
categories: apparel, home, accessories, and fragrances. The Company's
brands include the mid-range Chaps brand, to the sub-premium Lauren
Ralph Lauren brand, to the premium Polo Ralph Lauren, Double RL,
Ralph Lauren Childrenswear, Denim & Supply Ralph Lauren, and Club
Monaco brands, up to the full luxury Ralph Lauren Purple Label and
Ralph Lauren Collection brands.

Urban Outfitters, Inc. (URBN) is

a multinational lifestyle retail corporation headquartered
in Philadelphia, Pennsylvania. It operates in the United
States, Sweden, United
Kingdom, Spain, Denmark, France, Germany, Ireland, Belgium, Canada, 
Italy, the Netherlands, Poland and the United Arab Emirates. The Urban
Outfitters brand targets young adults with a merchandise mix of
women's and men's fashion apparel, footwear, beauty and wellness
products, accessories, activewear and gear, and housewares, as well as
music, primarily vinyl records and cassettes. Much of the merchandise is
designed and produced by the company's wholesale division on multiple
private labels.
American Eagle Outfitters, Inc., also known as American Eagle, is an
American lifestyle, clothing, and accessories retailer headquartered
at SouthSide Works in Pittsburgh, Pennsylvania. It was founded in 1977
by brothers Jerry and Mark Silverman as a subsidiary of Retail Ventures,
Inc., a company that also owned and operated Silverman's Menswear.
The Silvermans sold their ownership interests in 1991 to Jacob Price
of Knoxville, Tennessee. American Eagle Outfitters is also the parent
company of Aerie.

Hennes & Mauritz AB (H&M) is a Swedish multinational clothing

company headquartered in Stockholm. It is known for its fast-
fashion clothing for men, women, teenagers, and children. As of
November 2019, H&M operates in 74 countries with over 5,000 stores
under the various company brands, with 126,000 full-time equivalent
positions It is the second-largest global clothing retailer, behind Spain-
based Inditex (parent company of Zara). Founded by Erling Persson and
run by his son Stefan Persson and Helena Helmersson, the company
makes its online shopping available in 33 countries.

SOCIAL AND ENVIRONMENT RESPONSIBILITY

Forever 21 insists that all product suppliers ensure that their employees
work in safe and healthy environments and that their legal rights are
respected and protected. In addition, their Corporate Social
Responsibility program includes the Forever 21 Vendor Audit
Program.

AWARDS

Forever 21 won 1 award in 2017. In 2017, Forever 21 won for Best

Company for Diversity. Based on 4,445 ratings and 447 participants,
employees at Forever 21 are less satisfied with their work experience.
The overall culture score, 59/100 or D, incorporates employee ratings
based on their feedback on the Overall Culture, Professional
Development, Environment and more.

CUSTOMER LOYALTY

With a young, trend-conscious customer base, Forever 21 needs to cater

to shopper demand, in and out of the store. The Los Angeles-based, 760-
store-plus specialty apparel retailer is extending this seamless, customer-
centric approach to how it offers customers credit
 TROUBLES FACED

The rapidly changing retail sector put too much pressure on Forever 21,
and the privately held company filed for Chapter 11 bankruptcy in late
September. It announced that it will cease operations in 40 countries,
including Canada and Japan, and close 350 of its 800 stores, including
178 in the U.S.

Forever 21 expanded rapidly in a short period of time, going from

outlets in seven countries to 47 in just six years. Even as other chains
were downsizing amid the retail apocalypse, Forever 21 was opening
new stores as late as 2016.

“It’s kind of like The Gap, where they overbuilt the stores, too,” said
Kahn, who also hosts “Marketing Matters” on Sirius XM. “They weren’t
seeing the trends, and instead of slowing down on physical space, they
were building up physical space. That was a tactical mistake.”

It isn’t just the number of stores that is problematic, it’s also their size.
Forever 21 stores are huge, with the average size at 38,000 square feet,
according to the company’s website. The largest store is multiple stories
and takes up 162,000 square feet. The Times Square store in New York
City is 91,000 square feet, and a mall store in Las Vegas spans 127,000
square feet.

All that space is expensive, the experts said. Sales reportedly dropped by
20% to 25% last year, which means the company likely struggled to pay
the high rents demanded by premier spots while facing increased
competition from Zara and H&M, the other big players in the fast-
fashion segment.

“A lot of [Forever 21] stores were big footprints – almost as big as

department stores in some of the malls,” Kahn said. “When they close
down, it’s kind of like an anchor closing down. It doesn’t bode well for
those malls, either.”

The company’s rapid expansion in recent years is opposite to the

business strategy currently being deployed by retailers trying to save
themselves from extinction. Many chains are closing their big stores and
moving to smaller footprints and mini-shops as a way to shrink costs
while maintaining consumer access to their brands. Even big box
retailers like Target are opening smaller stores in metropolitan areas,
where big retail space is hard to find.

Meanwhile, “digital native brands — think of the Warby Parkers or the

Caspers of the world – they’re opening stores,” said Cesareo, whose
research specialty includes consumer behavior. “You would say it
almost wouldn’t make sense, but they are opening these small pop-up
shops and flagship stores where consumers can actually experience the
brands firsthand. There’s more of a shakeout in retail than a full
apocalypse right now. Retail is just repositioning itself.”

A Weak Focus on e-Commerce

Another big failure for Forever 21 is particularly baffling to Cesareo.
She said the company didn’t bolster its e-commerce platform, even
though its core customers are young people who prefer to shop online.
“It’s fascinating that they couldn’t predict that shift, so now they’re
forced to restructure their entire company and really put pressure on
their online commerce platform to try to make up for the lost sales,” she
said.

SUPPLY CHAIN

Like GAP, ZARA and other brands, Forever21 also adopts SPA
(SpecialtyretailerofPrivatelabelApparel), which is the professional
retailer business mode of clothing brand. It refers to the vertical sales
mode integrated from material reserve, planning, product development,
manufacturing, logistics, sales, commodity management, store planning,
etc.

Forever21's raw material procurement and production are mainly

concentrated in the third world, such as Vietnam, Indonesia and India.
Forever21 adopts the privatelabelgoods&othersupplier mode, that is, by
selecting close to different suppliers to produce products. Suppliers close
to the market produce seasonal popular products, while those away from
the market produce cheap core products.

LOGISTICS TRANSPORTATION AND STORAGE COMPANY

Starting in 2015, Forever21 hired EZWorldwideExpress as its

specialized carrier, which serves a total of 171 stores. The courier will
airpack the package to the international destination, and the customs
clearance team will clear the customs. The pre clearance system of the
company will send the copies of the shipment details to the foreign
customs clearance team before the package arrives at the destination
country, so that the clearance team can be prepared to accept the goods
ahead of schedule.
In terms of logistics services, Forever21 chooses the best delivery
company after consultation with its operators, and adopts a full 200 free
shipping strategy in China. In Japan and other high freight countries, it
reduces its cost by reducing its return rate.

One Stop Logistics Company for vehicle shipment of F21, they own a
vehicle warehouse about 120,000 square feet, we doing sea/air for both
import and export shipment. 

They do also for general cargo, class cargo and personal effect. 

CASE STUDY
From its reign as king of the mall just a few years ago to its tumble into
bankruptcy court last month, Forever 21 is a spectacular success story
that seems destined for an unhappy ending.

South Korean immigrants Jin Sook and Do Wan Chang started the chain
in 1984 with $11,000 that they saved from working in low-paying
service jobs. Their first store was a 900-square-foot space in Northeast
Los Angeles that offered cheap and trendy clothing to a young, mostly
Korean-American clientele.

But the couple had a plan. Their fast-fashion business model, which was
based on quick-turnaround designs that could be inexpensively mass
produced, proved wildly popular with young customers who didn’t have
much money to spend but wanted the latest looks. By 2015, global sales
peaked at $4.4 billion, with 480 stores occupying enormous spaces in
malls across America, according to Business Insider. Sook and Chang
became wealthy, with a combined estimated net worth of nearly $6
billion.
However, the couple didn’t anticipate the so-called retail apocalypse,
which began in 2017 and continues to threaten virtually every retail
chain. More than 8,200 stores in the U.S. have closed this year,
according to Coresight Research. The firm anticipates 12,000 closures
by year’s end, eclipsing the 5,844 closures in 2018.

The rapidly changing retail sector put too much pressure on Forever 21,
and the privately held company filed for Chapter 11 bankruptcy in late
September. It announced that it will cease operations in 40 countries,
including Canada and Japan, and close 350 of its 800 stores, including
178 in the U.S.

The dramatic rise and fall of Forever 21 is a story that repeats in similar
fashion across the retail landscape, but there are some factors specific to
the chain’s troubles. Wharton marketing professor Barbara
Kahn and Ludovica Cesareo, marketing professor at Lehigh University,
analyzed the case on the Knowledge@Wharton radio show and outlined
three distinct reasons why Forever 21 failed to stay on top. 

DUAL SOURCING

The Oct 5 edition of the Wall Street Journal described “fast fashion” at
Forever 21, a chain started by Korean immigrants in Los Angeles. The
store was reported to have revenues of over $ 3 billion in 2010. The
company uses local manufacturing sources in Los Angeles for their
fashion products and lower cost sources, with long lead times, for their
basic products. Such a strategy has enabled them to both react to trends
and compete on price. The article focuses on the company’s expansion
plans in Europe and going global.  At the heart of their strategy is the
ability to carefully manage the supply chain to have both, as Marshall
Fisher describes in his HBR article, “responsive” and “efficient” supply
chain structures to offer”functional” and “innovative” products.

HOW IT SOLVED ITS BANKRUPTCY AND CAME BACK TO THE

MARKET

The clothing brand Forever 21 is making a return to the Canadian

market after an agreement with Hudson's Bay Co. allowing them to offer
collections inside the department store. Forever 21 debuts today at
Hudson's Bay stores in Toronto's Yorkdale Mall and the Square One
Shopping Centre in Mississauga, Ont.

Retailer Forever 21 has been saved from bankruptcy by three buyers

who want to expand internationally. New owners, Authentic Brands,
Simon Property and Brookfield Property, also want to keep open most of
the chain's 448 US stores.

CONCLUSION

Forever 21, stylized as FOREVER 21, is an American fast fashion

retailer headquartered in Los Angeles, California. Forever 21 is known
for its fashionable and trendy offerings with very low pricing, while it is
an epitome of the rapidly-growing fast fashion industry.

Forever 21 needs to focus on innovation, authenticity and original

designs. Forever 21, like its owners, developed from one small storefront
to one of the world's largest fashion retail companies.
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